The ending balance of owner's capital is calculated as
A)Assets plus liabilities.
B)Owner's capital account balance minus loss plus the withdrawals account balance.
C)Profit minus the withdrawals account balance.
D)Owner's capital account balance plus profit minus the withdrawals account balance.
E)None of these answers is correct.

Question

Quizplus · Accepted Answer

The owner's ending capital balance is calculated by adding the beginning capital balance to any profit or income earned during the period and then subtracting any withdrawals made by the owner during the period. Therefore, the formula is Owner's Capital Account Balance + Profit - Withdrawals. Option D matches this formula.

The Ending Balance of Owner's Capital Is Calculated as